ENGINEERING ECONOMICS                                    

                                                                 INTRODUCTION

Economy is a term use to describe the state where flow of life sustaining valuable processes are involved in order to bring in the interaction of people indulged in any economic activities that comes under the definition of economy. Balanced economy is the situation where the in flow and outflow in the particular region under study is exactly equal when it is measurable and measured in terms of economic measuring tool. Ignoring the origin from where the term bore from and it’s complexities in extreme definitions, economy can be simply understood as the position of goods and services entry rate in the market and its corresponding consumption rate.

 Self sustaining economy is the state of economy where there is no trade but a production and self consumption. This type of economy existed in ancient worlds and still in remote corners of the world today.  Because of the unavailability of the resources in the respective particular regions to fulfill the desired needs, people started the trade. Agro based economy was very later to the first human civilization. Initial state of human sustenance came through the animal flesh feeding. The real human civilization which began from Nile valleys, Hwangho valleys etc… was primarily an agricultural economy.

Basically in earlier days economy simply means the life sustaining goods and commodities. It encompassed the basic needs like food, shelter, clothing etc. when the time flowed, the human revolution, modification and changes took place so rapidly and that lead to tremendous need of the subject economics. The subject grew so broad that today it covers even the sociology and psychology. In this very current era economy has deviated from needs to wants focus. Economist’s has invented the economic progress measuring tool and it has ambiguously put up the terms developed, under developed and developing to define the country’s economic status which sometimes seems debatable, arguable and modifiable.

Barter system was the infant state of trade where there was no invention of trade tool like coin, paper money etc. Here trade tool simply mean that this tool enables the trade. Sell and buy came into life activity very later period of the barter system. Money invention refined the trade into very simplex conduct. Because of the trade of goods, later the services also entered market making the economic study much wider. Trade definition which basically means the exchange of goods and services has modified itself in bigger aspects to indicate it also defines the country’s ability to stand in world market and economy. Market is the situation where the sellers are willing to sell their goods, services and commodities to the buyers. It can also be a situation where buyers are willing to buy the goods, services and commodities. The interaction and link between these two, buyers and sellers, when occurs due to each others willingness it defines the business. Business is the existence of sellers and buyers in one exact situation where they interact depending on the demand and supply. Trade at this juncture defines of greater perception that, when business between countries occurs it is termed as trade.

Nowadays due to emerge of computers, the trade and economy has boosted itself to larger scope accounting through the computers. Macro economics which deals with the vast and big issues of economic has ascended the slope to see much broader aspect of its position. Micro economics meanwhile has risen to cover every minute factor in economy. So studying the trend, it is clear economy of the world has grown from an egg to a butterfly. But why economic recession, depression etc occurs?

Since the modern world is as much concerned with production and manufacturability, I will bring here some aspect of engineers in economy. I will define ideal economy situation and a marginal economy situation. I bring here the economic progress measuring tool and the ratings. I present you the satisfaction and its demerits of modern world.  I also present you readers, BHUTAN’s scenario in modern economy. In this journal I am much concerned about not how much a country can produce but how much a country can benefit its people. This beneficiary to the public and improvement of social welfare is termed as economic development slightly different from what we call the economic growth. Economic progress is a general term that incorporates both growth and development together. It happens here that the economic progress is the direct function of the economic growth and development. A country is said to be well economically growing when the country’s GDP grossly increases but country can be rated economically well developing only when the benefits reach to the most poverty line of the country is improving. A good example to the former one would be India and later one the china.

If something is measurable, it should have limits and the maximum limit here in economy is the ideal economy which in reality or practical situation may not be yielded. How political, social, geological, psychological and religious aspects influence the determination of economic flow curve is presented here. What may be a guiding philosophy and principles may not be necessarily a tool that can quantify one. I bring you here with respect to Bhutan’s economic situation, how one kilogram of rice may affect the economy of rural life and same one kg of rice may affect in urban life. What difference in the position has made the curves look so different in the plot? Integrating and generalizing into single entry and exit I present here the summarized economic preys and predators of the world shop.

BY SANGA DORJI (mentor- Prof. P.P.S.)